Startups reinvigorating Indian medicine with Ayurveda 2.0
A small band of young consumer firms
riding the Patanjali wave is repackaging the ancient healing system for
health-conscious Indians, and forcing investors to take note.
As a teenager, Arjun Vaidya spent hours writing out his
grandfather Dr Natoobhai Vaidya’s closely-guarded formulas by hand, in the
process immersing himself in one of the most successful Ayurvedic medicine
practices in Mumbai.
Fast forward almost a decade, and armed with an Economics and Politics degree from Brown University and a stint with L Catterton Asia, the private equity arm of luxury goods conglomerate LVMH, Vaidya decided to revisit his roots. He launched Dr Vaidya’s in 2016, the eponymous Ayurveda-focused startup.
“We see ourselves as a consumer products company. While Ayurveda may not be seen as sexy, it can be brought into the 21st century,” Vaidya, now 26, told ET. “The organic revolution was taking place in the West, and the whole Patanjali wave towards building interest in Ayurveda had also started.”
Dr Vaidya’s manufactures its own products from its wholly-owned facility in Silvassa, sourcing its raw materials from more than 20 vendors across the country and selling its products through a mix of offline and online distribution channels.
The Mumbai-based venture isn’t the only consumer startup looking to cash in on the growing Ayurveda market, presently estimated at $3 billion. An emerging segment of food and beverage-focused startups has launched Ayurveda-based products including ready-to-drink juices, capsules and nutrition powders.
The segment has been dominated for decades by legacy players such as the Rs 79,000-crore Dabur India and the privately-held Baidyanath Group. Startups have begun to crash the party with their concept of ‘Ayurveda 2.0’—their USP being their ability to combine the vital herbs that could number up to 5,000, with modern nutritional practices.
Ayurveda, or the ‘science of life’, is a 5,000-year-old system of traditional medicine and healing, having its roots in India. But startups such as Dr Vaidya’s, KIVA, &Me and Kapiva have all seized upon the opportunity to manufacture, repackage and sell products modernised for the 21st century to increasingly health-conscious Indians.
“Ayurveda, as a concept, has always enjoyed immense awareness and trust but suffered from low adoption, particularly among millennials. Patanjali has played a strong role in reinvigorating that interest and driving (Ayurveda) into the mainstream,” said Shalabh Gupta, CEO of KIVA.
The Gurgaon-based twoyear-old venture, founded by IIMAhmedabad and IIT-Delhi alum Gupta, manufactures and markets a range of ready-to-drink Ayurvedic shots and jaggery candies.
Through their conversations with ET, the impact of Patanjali Ayurved, the Baba Ramdev-promoted company that over the past four years has shaken up the country’s $50-billion consumer product sector, comes through loud and clear.
“We saw there was an opportunity to build a brand around Ayurveda, given its legacy and acceptance. Patanjali’s track record and what they’ve managed over the past few years has been phenomenal. There are a lot of learnings to be taken from that,” Gupta said.
To put it simply, the founders are putting together a multipronged strategy—iden- tifyinga niche, doubling down on their supply chain and distribution networks, and building on the Ayurveda brand. Because in the end, as they put it, it’s about the four Ps — product, pricing, placement and promotion.
Investors are listening.
“The trend towards natural products is a global one. It’s certainly not a fad,” said Deep Mishra, managing director at Everstone Capital. Mishra leads the consumer and pharma sector for the mid-market firm, having led its investment in Modern Foods and Cookie Man.
Dr Vaidya’s is in talks with multiple investors for its first fundraise, a process that could conclude by the end of the year. Kiva counts Zomato cofounder Pankaj Chaddah and Max Healthcare CEO Rajit Mehta among its investors.
And this month, Matrix Partners India invested about $4,00,000 in Bengaluru-based &Me, which makes and sells Ayurveda-based nutritional beverages for women.
“People across the world are moving towards healthier lifestyles and India is no exception. Indian brands are uniquely positioned to use our heritage of Ayurveda and combine it with modern science to create truly efficacious, world-class products,” said Sanjot Malhi, vice president at Matrix Partners India.
For any consumer company, supply chain and distribution is possibly the most important, yet most difficult, aspect to set up in order to not just scale but also compete with bigger, more established peers.
But the Ayurveda startup sector “still doesn’t have a well-established supply chain or logistics (network)… In this case, you have to also add the other complexities of claim validation, building trust, and creating the right sources and manufacturing processes,” pointed out Kanwaljit Singh, managing partner of Fireside Ventures.
&Me sources its raw materials from about 40 vendors across India and Nepal. The raw materials then get refined at a facility in Nagpur. KIVA also sources raw materials from diverse locations including Sirohi, Jalgaon and Sikkim. The raw materials are then processed and manufactured in two factories, situated in Hoshiarpur and Jaipur.
The distribution channels are a mix of online and offline. The companies not only sell through their websites and major online retailers such as Amazon but have also tied up with big box retailers.
KIVA has tied up with Big Bazaar, Spencer’s and Godrej Nature’s Basket, apart from online retailers HealthKart and 1mg. &Me has a different distribution strategy.
“We aren’t working with national retail chains yet, but with well known city-specific retail stores.MK Retail, Sowbhagya, FreshOne, which have seven-eight stores each in the city,” Goyal said. “The focus is more on cracking distribution and supply chain before going to a big chain. The best way to fight the big boys is to start small, so you go unnoticed and can slowly build your strength and relationships.”
While early days yet, the broader opportunity is unmistakable.
“We have met a lot of companies and would love to invest in the space,” said Singh of Fireside Ventures. “If we see an opportunity for a business that can establish a global footprint, and if our sensibilities ally with those of the founder, it’s a no-brainer.”
Fast forward almost a decade, and armed with an Economics and Politics degree from Brown University and a stint with L Catterton Asia, the private equity arm of luxury goods conglomerate LVMH, Vaidya decided to revisit his roots. He launched Dr Vaidya’s in 2016, the eponymous Ayurveda-focused startup.
“We see ourselves as a consumer products company. While Ayurveda may not be seen as sexy, it can be brought into the 21st century,” Vaidya, now 26, told ET. “The organic revolution was taking place in the West, and the whole Patanjali wave towards building interest in Ayurveda had also started.”
Dr Vaidya’s manufactures its own products from its wholly-owned facility in Silvassa, sourcing its raw materials from more than 20 vendors across the country and selling its products through a mix of offline and online distribution channels.
The Mumbai-based venture isn’t the only consumer startup looking to cash in on the growing Ayurveda market, presently estimated at $3 billion. An emerging segment of food and beverage-focused startups has launched Ayurveda-based products including ready-to-drink juices, capsules and nutrition powders.
The segment has been dominated for decades by legacy players such as the Rs 79,000-crore Dabur India and the privately-held Baidyanath Group. Startups have begun to crash the party with their concept of ‘Ayurveda 2.0’—their USP being their ability to combine the vital herbs that could number up to 5,000, with modern nutritional practices.
Ayurveda, or the ‘science of life’, is a 5,000-year-old system of traditional medicine and healing, having its roots in India. But startups such as Dr Vaidya’s, KIVA, &Me and Kapiva have all seized upon the opportunity to manufacture, repackage and sell products modernised for the 21st century to increasingly health-conscious Indians.
“Ayurveda, as a concept, has always enjoyed immense awareness and trust but suffered from low adoption, particularly among millennials. Patanjali has played a strong role in reinvigorating that interest and driving (Ayurveda) into the mainstream,” said Shalabh Gupta, CEO of KIVA.
The Gurgaon-based twoyear-old venture, founded by IIMAhmedabad and IIT-Delhi alum Gupta, manufactures and markets a range of ready-to-drink Ayurvedic shots and jaggery candies.
Through their conversations with ET, the impact of Patanjali Ayurved, the Baba Ramdev-promoted company that over the past four years has shaken up the country’s $50-billion consumer product sector, comes through loud and clear.
“We saw there was an opportunity to build a brand around Ayurveda, given its legacy and acceptance. Patanjali’s track record and what they’ve managed over the past few years has been phenomenal. There are a lot of learnings to be taken from that,” Gupta said.
To put it simply, the founders are putting together a multipronged strategy—iden- tifyinga niche, doubling down on their supply chain and distribution networks, and building on the Ayurveda brand. Because in the end, as they put it, it’s about the four Ps — product, pricing, placement and promotion.
Investors are listening.
“The trend towards natural products is a global one. It’s certainly not a fad,” said Deep Mishra, managing director at Everstone Capital. Mishra leads the consumer and pharma sector for the mid-market firm, having led its investment in Modern Foods and Cookie Man.
Dr Vaidya’s is in talks with multiple investors for its first fundraise, a process that could conclude by the end of the year. Kiva counts Zomato cofounder Pankaj Chaddah and Max Healthcare CEO Rajit Mehta among its investors.
And this month, Matrix Partners India invested about $4,00,000 in Bengaluru-based &Me, which makes and sells Ayurveda-based nutritional beverages for women.
“People across the world are moving towards healthier lifestyles and India is no exception. Indian brands are uniquely positioned to use our heritage of Ayurveda and combine it with modern science to create truly efficacious, world-class products,” said Sanjot Malhi, vice president at Matrix Partners India.
For any consumer company, supply chain and distribution is possibly the most important, yet most difficult, aspect to set up in order to not just scale but also compete with bigger, more established peers.
But the Ayurveda startup sector “still doesn’t have a well-established supply chain or logistics (network)… In this case, you have to also add the other complexities of claim validation, building trust, and creating the right sources and manufacturing processes,” pointed out Kanwaljit Singh, managing partner of Fireside Ventures.
&Me sources its raw materials from about 40 vendors across India and Nepal. The raw materials then get refined at a facility in Nagpur. KIVA also sources raw materials from diverse locations including Sirohi, Jalgaon and Sikkim. The raw materials are then processed and manufactured in two factories, situated in Hoshiarpur and Jaipur.
The distribution channels are a mix of online and offline. The companies not only sell through their websites and major online retailers such as Amazon but have also tied up with big box retailers.
KIVA has tied up with Big Bazaar, Spencer’s and Godrej Nature’s Basket, apart from online retailers HealthKart and 1mg. &Me has a different distribution strategy.
“We aren’t working with national retail chains yet, but with well known city-specific retail stores.MK Retail, Sowbhagya, FreshOne, which have seven-eight stores each in the city,” Goyal said. “The focus is more on cracking distribution and supply chain before going to a big chain. The best way to fight the big boys is to start small, so you go unnoticed and can slowly build your strength and relationships.”
While early days yet, the broader opportunity is unmistakable.
“We have met a lot of companies and would love to invest in the space,” said Singh of Fireside Ventures. “If we see an opportunity for a business that can establish a global footprint, and if our sensibilities ally with those of the founder, it’s a no-brainer.”
Biswarp Gooptu | ET
Bureau | August 31, 2018, https://retail.economictimes.indiatimes.com/news/health-and-beauty/pharmacy/startups-reinvigorating-indian-medicine-with-ayurveda-2-0/65617644
No comments:
Post a Comment